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In addition to managing the company's tech gear, Markezich and his department function as a test bed for new Microsoft products. So since taking over as CIO last spring, Markezich has had a busy time of it. First, he moved Microsoft's entire network to Windows XP Service Pack 2. Nowadays, he's in the midst of testing out new versions of SQL Server and Visual Studio.
In a recent interview with CNET News.com in San Francisco, Markezich spoke about what's new in Microsoft's data center, how offshore outsourcing won't grow significantly, and why you won't find a Linux or Oracle application in his data center. We didn't ask him his least favorite question, "What keeps you up at night?" Markezich told a panel of Silicon Valley techies recently that he sleeps just fine, thank you very much.
Q: What are the benefits and challenges of being basically a test bed for Microsoft's products?
A: There's huge benefit for me, because I get the products well before anyone else. I get to start using them and get benefits out of the technology very early.
The drawbacks? You do find issues. We're testing at alpha stage and beta stage, so you are going to find issues. We manage that fairly well. We won't put all 90,000 mailboxes on Exchange beta. We'll phase the deployment. We start with the product group that developed the product, so they feel the pain first.
What are some of the Microsoft products that you are in the process of adopting?
Last year, with Exchange, Windows, and SMS--that really dealt with the IT infrastructure side. We got huge benefits. We talked about taking $100 million out of the cost of the infrastructure. What we are doing right now is focused on the application side, so SQL Server 2005 and Visual Studio System 2005 are the big ones.
How much of your job do you see as business process transformation versus pure technology?
More and more of it is business process transformation. If you look at my job and a lot of CIOs' jobs, they are some of the only functions that span the entire company. Most companies are aligned by business divisions. They have CEOs, and then there are leaders of the business organizations that are "siloed."
Do you use any Linux?
As a policy, I don't run anything that competes with Microsoft. My goal is to make sure Microsoft products are the best products in the world. It's an easy choice for me, in that sense--to run Microsoft technology. We don't run Unix. We don't run Linux. We don't run Oracle. We're 100 percent Windows, SQL Server.
We do, in areas on the client, have an open-source client running--just for competitive analysis. As an IT organization, I have no skills and no ability and no purchasing of those products. We don't even run J2EE. Everything is .Net.
How much of your department's time, as an IT organization, is spent on security? We've heard the figure 10 percent thrown around.
It's hard to capture the overall time spent on security, but 10 percent is probably about right.
It seems as if companies are shifting their attention from broad threats (mass-mailing viruses, distributed denial-of-service attacks) to specific threats--that is, those targeted at a particular company.
In the past, it's always been the DDoS attacks bringing down the network. In a way, those are not as harmful as the malicious attacks.
The other thing on the security side is governance: Sarbanes-Oxley and regulatory compliance. I think a lot more time right now is being spent on compliance and the regulation. It probably is competing with the amount of time spent on traditional security.
How about the things we are hearing a lot about--spam and spyware?
We get a lot of spam. We get 10 million e-mails a day coming into Microsoft. We delete more than 9 million of those as spam. Spyware, malware--you continue to have to scan the network and protect against it. Our users are the admins of their machines. They can load whatever software they want on their machines, but we do audit the network continuously. I am continuously scanning the 300,000 machines on my network and assuring that they adhere to the security policy. If they don't, we address that remotely or we disconnect them from the network.
You have said that you don't see offshore outsourcing growing significantly. That struck me.
I don't think it's growing significantly. It's definitely here to stay. It's not going to go away. My biggest issue is finding enough good people in the United States.
I've got a couple hundred open positions that I want to find people--primarily in Redmond--to fill. It's one of the things that come up when I talk to college students and they ask, "Is IT a good career?" It's a wonderful career for someone in the United States coming out of college. The whole feeling that offshoring is going to kill the IT industry in the U.S. and that there are no IT jobs is way overblown. In my career in IT, other than the bubble, I've never seen a greater demand for IT skills other than right now.
That might explain why IT continues to be strong in the United States. Why doesn't it still grow offshore?
I think it will grow. The question is whether it grows significantly. I don't know. It will grow outside the U.S., just like it will grow inside the U.S.
Is that because there are only so many functions that can be physically distant?
Many functions can be distant. There just are efficiencies of
Microsoft is fairly unique in that regard. If there is a spectrum of how much of a company's value is being geographically central, then Microsoft is definitely at one end.
To build products, you need to have people talking to make sure you have integration, so proximity helps. I don't know that it grows significantly from here. We have great partners in India; we have great partners in China. We have great products around the world. We will continue to use them.
What kind of stuff does Microsoft IT have others do?
We outsource our tier-one call center to Hewlett-Packard. Our desk-side support is outsourced, depending on the region, to either Fujitsu-Siemens or to HP. We do outsource some applications development and maintenance to a variety of vendors--Accenture, Electronic Data Systems, Infosys Technologies, BearingPoint. Typically, what we don't outsource are those areas directly tied to our products. We never want to outsource all of our applications development, because we want to be driving improvements in BizTalk and SQL Server and Visual Studio.
It sounds like you have outsourced where you can already.
I don't know that I will grow the way in which I use vendors. I don't look at the whole offshoring thing as a cost deal. The cost savings honestly aren't that significant, and there is additional risk. To me, it's a talent base. It's another pool of talent, and that's the biggest advantage.
So if there were enough talent here, it probably isn't something you would be looking at?
It's an alternative for me when I can't find the talent in the United States.
People make the argument that Microsoft is in a different position than others when it comes to that, because other organizations are more cost-sensitive.
We're very cost-sensitive. I think that is a misconception about Microsoft. What Wall Street measures you on is your earnings growth every quarter. Your expenses need to go slower than your revenue, so we've got to be cost-conscious. When I look at my IT spend as a percent of revenue, it's decreased every year over the last five years for the IT organization--even though head count has grown every year for the company.
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With some of us, it is more than a "feeling."
"I don't know that I will grow the way in which I use vendors. I don't look at the whole offshoring thing as a cost deal. The cost savings honestly aren't that significant, and there is additional risk. To me, it's a talent base. It's another pool of talent, and that's the biggest advantage"
"We're very cost-sensitive. I think that is a misconception about Microsoft. What Wall Street measures you on is your earnings growth every quarter. Your expenses need to go slower than your revenue, so we've got to be cost-conscious. When I look at my IT spend as a percent of revenue, it's decreased every year over the last five years for the IT organization--even though head count has grown every year for the company."
How can you grow head count and lower labor costs? "Buehler..., Buehler...,", OK, I'll answer this one - lay off the fat cats and hire the hungry ones. When the windbags say "looking for talent in the USA", the subtext is 'looking for something below the $30k threshold.'
I know, I know, I can hear it now..."it's just doing busines like everyone else, blah, blah, blah..." It doesn't hit me because with nearly two decades of experience in IT with business analyst and project management skills, I have kept and will always have a job one way or the other.
But then again, it's almost poetic to see the same thing happen to Microsoft. We don't want to pay the fat cat OS owner for what their worth, we'll take Open Source and save ourselves over 33% savings in two years. Yeah, that's poetry.
How is Microsoft going to build a better product without understanding the highlights and shortcomings of competing products? Using a competitor's product is critical to gaining that understanding, and a basis for innovative development and marketing a successful alternative.
Lack of diversity in the gene pool causes defects and mutations. By analogy, the lack of Microsoft's exposure to competing products weakens the pool of innovation and marketability.
I think Mr. Markezich confuses blind brand loyalty with technical superiority, and I have something for him and his company to think about.
Microsoft has consistently taken the approach that the browser is an integral part of the operating system. I like the ease of use, speed and appearance of Microsoft Internet Explorer. However, I sometimes use Mozilla which has a better pop-up blocker and is less susceptible to being exploited. Suppose Linux were built around the Mozilla browser, and linux distributions become standardized (which is coming). This presents an attractive alternative -- common interface, widespread support, and of course, the software is free! In the above illustration, the browser is used as a bridge to linux and a marketing tool.
Mr. Markezich's position is to refuse acknowledgement of competition and seek refuge in ignorance. I hope that his opinion does not echo the corporation's mentality. Microsoft became the company it is today because of slingshotting an ignorant Goliath (i.e. IBM). Mozilla could be the next slingshot in David's pocket.
His mandate is to run MS products and beat the hell out of them. What don't you understand about that? He works for the company that makes them for Christ's Sake !!!!
OH, and I suppose that if you were in his position you'd be telling Steve Ballmer that you'd rather run a "blend" of products because you don't want a "weak gene pool". You'd be out on your ass so fast you wouldn't know what hit you.
Now go back to your momma and get some sense would you.
"As a policy, I don't run anything that competes with Microsoft. My goal is to make sure Microsoft products are the best products in the world. It's an easy choice for me, in that sense--to run Microsoft technology. We don't run Unix. We don't run Linux. We don't run Oracle. We're 100 percent Windows, SQL Server."
I suppose he's unaware of the fact that their sales-automation system, Siebel, has Oracle on the back-end. Did they manage to re-write it to use SQL Server instead in the last year? What about all of the Peoplesoft floating around out there on their corporate net? That's Oracle now too isn't it? :)
Maybe if he doesn't *personally* use it he's still telling the truth. Right?
It was a brutal implementation 4-5 years ago because SEBL wasn't designed to run on SQL Server very well, but that was part of the "get" they had in mind when they chose SEBL as their CRM...yet another example of what their CIO was saying here.
Why is it that fools who want to rip on MS often have their facts wrong?
If you want to pick on this guy you could point out that he uses Siebel instead of Microsoft CRM. But the answer to that is Microsoft CRM was not available when they implemented their CRM.
Conservatively - assuming each is read by at least one person - some boxes would be team dist. lists.
Couldn't happen to a nicer company...
Don't bother ever sending MSFT your resume'.
So actually, of those 9 million, 4 million goes to Bill Gates himself. The other 90,000 or so employees share the other 5 million spam emails.
Pro has blocked this page from loading completely. Excessive BS
has been detected. BS Level: 84%. To change your preferences,
click 'Preferences'." I tried lowering the BS threshold, but it
would not let me lower it enough to read the article. Any
suggestions?
Windows Server 2003
Microsoft-IIS/6.0
21-Oct-2004 64.4.32.7 MS Hotmail
Windows Server 2003
Microsoft-IIS/6.0
20-Oct-2004 64.4.32.7 MS Hotmail
unknown
Microsoft-IIS/6.0
19-Oct-2004 64.4.32.7 MS Hotmail
Windows Server 2003
Microsoft-IIS/6.0
29-Sep-2004 64.4.33.7 MS Hotmail
Windows 2000
Microsoft-IIS/5.0
9-Aug-2003 64.4.33.7 MS Hotmail
Windows 2000
Microsoft-IIS/5.0
4-Aug-2003 64.4.32.7 MS Hotmail
Windows 2000
Microsoft-IIS/5.0
28-Feb-2003 64.4.52.7 MS Hotmail
unknown
Microsoft-IIS/5.0
27-Feb-2003 64.4.43.7 MS Hotmail
Windows 2000
Microsoft-IIS/5.0
6-Jul-2002 64.4.53.7 MS Hotmail
Windows 2000
Microsoft-IIS/5.0
5-Jul-2002 64.4.44.7 MS Hotmail
There is a major focus at Hotmail to remove reliance on Sun, and the reason has little to do with Microsoft relying on a competitors' equipment -- it has more to do with expensive contractual agreements, especially in regards to those contracts with Sun involving T3 repair, log collection, and hardware costs.
There is a project within Hotmail to migrate to pure Windows 2003 Server on the back end. The name of the project is Satchmo. This isn't proprietary or private information -- you can find mentions of Satchmo over at dice.com and monster.com from contracting agencies who blindly stuck internal project names into their own headhunting applications.
I've no idea if 2K3 is now running predominantly on the back end of Hotmail or not; the last I heard, the test environment was running pretty smoothly, and was much MUCH less expensive.
Ron Markezich indicates that his IT spend as a share of revenue has been decreasing over the past 5 years. One aspect of this figure is of question to me: the in-kind (non-costed) support he receives from the best MSFT engineering talent in the biz.
It's hardly unfair to say that most (if not all) other MSFT adoptees cannot go directly to product engineering when they have problems with Exchange, SQL Server, or other enterprise-class products.
This capability that Markezich's IT org alone possesses gives them a sizable reduction in IT spend over other IT orgs. As a CIO in one of those orgs, I am envious of Markezich in this regard.
The fact that MSFT can only use MSFT products (and that everyone in the org knows this) neatly eliminates one very thorny point of contention in most other orgs that attempt to get this type of adoption. (Even other large software companies [Sun, Oracle] aren't able to be monoculture IT orgs--they still have to run Microsoft on the desktop.)
It's hard (and often unrewarding) as a CIO to continually spend the social capital with other functional heads to encourage them to work in tandem with an IT org that has made the MSFT adoption decision.
All in all, another helpful look at MSFT. Thanks again.
Windows always used NETBieu...later on it came up with TCP/IP....
No, Linux did not 'come up' with TCP/IP. TCP/IP was developed by Bob Kahn and Vinton Cerf, many, many moons ago (well before Linux was even thought of).